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Waste Mgmt. meets its mark
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November 13, 1998: 8:13 a.m. ET
Merger charges drive 3Q into the red, but adjusted income soars 87 percent
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NEW YORK (CNNfn) - Despite a jaw-dropping $1.3 billion net loss for the latest quarter, due mostly to merger costs, Waste Management Inc. Friday managed to meet Wall Street's expectations.
The Houston-based company posted a loss of $2.21 per diluted share for the third quarter, ended Sept. 30, compared with earnings of 10 cents a share last year.
When adjusted for one-time charges, however, including a $1.6 billion merger charge, Waste Management's net income grew 87 percent to $291.3 million, or 49 cents a share, from $156.2 million, or 28 cents a share, in same period last year.
Operating income, on an adjusted basis, grew 53 percent to $669.7 on revenue of $3.2 billion.
At the same time, Waste Management took in revenue of $3.2 billion, up from $3.1 billion in the year-ago quarter.
"I am pleased with our operating results for the third quarter, especially the progress made in integrating the operations of the former USA Waste and former Waste Management," said John E. Drury, chief executive officer of Waste Management. "We had estimated that we would realize between $50 million and $75 million in merger synergies during the quarter, and approximately $64 million are reflected in the third-quarter numbers."
He added the company posted an internal growth rate of 5.4 percent for the quarter in the core North American solid waste business segment, and both pricing and volume continue to be "very strong."
For the nine months, Waste Management's net loss totaled $851.7 million, compared with earnings of $365 million a year ago. When adjusted for charges, the company earned $723 million for the latest period, up from $534 million a year earlier.
In August, Waste Management agreed to merge with competitor Eastern Services Inc. in a stock deal valued at $1.3 billion.
The merger is expected to close by the end of the year.
Waste Management said the synergies created through the combination will save the company roughly $75 million in 1999.
Houston-based Waste Management provides waste management services throughout the United States, the District of Columbia, Canada, Puerto Rico and Mexico. The company serves municipal, commercial, industrial and residential customers.
Shares of the company (WMI) finished up 2-11/16 at 48-3/4 on the New York Stock Exchange. 
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